It is unclear whether albuminuria and reduced glomerular filtration rate (GFR) independently increase the risk of incident stroke and coronary artery disease (CAD) in Japanese patients with diabetes. We investigated the independent effects of albuminuria and estimated GFR (eGFR) on the first occurrence of stroke and CAD in patients with type 2 diabetes mellitus (T2DM). We studied 1002 T2DM patients with eGFR (ml min⁻¹ per 1.73 m²) ≥15 and had no previous cardiovascular disease (CVD) history. GFR was estimated using the modified three-variable equation for the Japanese. Patients were divided into four eGFR categories: ≥90, 60-89, 30-59 and 15-29. The end point was an incident stroke and CAD events. The Cox proportional hazard model was used to calculate hazard ratio and 95% confidence interval. During a mean follow-up period of 5.2±2.1 years, 72 episodes of stroke and 90 of CAD were observed. Multivariate Cox analysis revealed no significant association between the eGFR category and incident stroke. The stroke hazard ratio (95% confidence interval) in reference to patients with an eGFR ≥90 was 0.78 (0.40-1.56) for patients with an eGFR of 60-89, 1.47 (0.70-3.10) for patients with an eGFR of 30-59 and 1.14 (0.39-3.35) for patients with an eGFR of 15-29. Reduced eGFR was a significant risk factor for CAD, with hazard ratios (95% confidence interval) for patients with an eGFRs of 60-89, 30-59 and 15-29 at 1.81 (1.01-3.57), 2.03 (1.04-4.40) and 3.01 (1.13-8.02), respectively. Reduced eGFR is independently associated with incident CAD but not stroke in Japanese patients with T2DM.